New Jersey | 65-1241959 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
601 Delsea Drive, Washington Township, New Jersey | 08080 |
(Address of principal executive offices) | (Zip Code) |
Page | ||
Part I | FINANCIAL INFORMATION | |
Item 1. | Financial Statements | |
Item 2. | ||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | |
Item 4. | Controls and Procedures | |
Part II | OTHER INFORMATION | |
Item 1. | Legal Proceedings | |
Item 1A. | Risk Factors | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 3. | Defaults Upon Senior Securities | |
Item 4. | Mine Safety Disclosures | |
Item 5. | Other Information | |
Item 6. | Exhibits | |
SIGNATURES | ||
EXHIBITS and CERTIFICATIONS |
June 30, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Cash and due from financial institutions | $ | 6,319 | $ | 14,452 | |||
Federal funds sold and cash equivalents | 103,892 | 27,661 | |||||
Total cash and cash equivalents | 110,211 | 42,113 | |||||
Investment securities available for sale, at fair value | 34,235 | 37,991 | |||||
Investment securities held to maturity (fair value of $1,258 at June 30, 2018 and $2,468 at December 31, 2017) | 1,086 | 2,268 | |||||
Total investment securities | 35,321 | 40,259 | |||||
Loans held for sale | 1,839 | 1,541 | |||||
Loans, net of unearned income | 1,101,243 | 1,011,717 | |||||
Less: Allowance for loan losses | (17,273 | ) | (16,533 | ) | |||
Net loans | 1,083,970 | 995,184 | |||||
Accrued interest receivable | 4,271 | 4,025 | |||||
Premises and equipment, net | 6,964 | 7,025 | |||||
Other real estate owned (OREO) | 6,158 | 7,248 | |||||
Restricted stock, at cost | 5,858 | 6,172 | |||||
Bank owned life insurance (BOLI) | 25,499 | 25,196 | |||||
Deferred tax asset | 6,624 | 6,420 | |||||
Other assets | 2,920 | 2,269 | |||||
Total Assets | $ | 1,289,635 | $ | 1,137,452 | |||
Liabilities and Equity | |||||||
Liabilities | |||||||
Deposits | |||||||
Noninterest-bearing deposits | $ | 210,669 | $ | 124,356 | |||
Interest-bearing deposits | 807,227 | 742,027 | |||||
Total deposits | 1,017,896 | 866,383 | |||||
FHLBNY borrowings | 104,650 | 114,650 | |||||
Subordinated debentures | 13,403 | 13,403 | |||||
Accrued interest payable | 1,116 | 719 | |||||
Other liabilities | 7,928 | 7,517 | |||||
Total liabilities | 1,144,993 | 1,002,672 | |||||
Equity | |||||||
Preferred stock, 1,000,000 shares authorized, $1,000 liquidation value Series B - non-cumulative convertible; 9,195 shares outstanding at June 30, 2018 and 15,971 shares outstanding at December 31, 2017 | 9,195 | 15,971 | |||||
Common stock, $0.10 par value; authorized 15,000,000 shares; Issued: 9,956,210 shares at June 30, 2018 and 8,301,497 shares at December 31, 2017 | 996 | 830 | |||||
Additional paid-in capital | 104,866 | 81,940 | |||||
Retained earnings | 32,156 | 39,184 | |||||
Accumulated other comprehensive loss | (797 | ) | (130 | ) | |||
Treasury stock, at cost, 284,522 shares at June 30, 2018 and at December 31, 2017, respectively, | (3,015 | ) | (3,015 | ) | |||
Total shareholders’ equity | 143,401 | 134,780 | |||||
Non-Controlling Interest | 1,241 | — | |||||
Total equity | 144,642 | 134,780 | |||||
Total liabilities and equity | $ | 1,289,635 | $ | 1,137,452 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands except share data) | |||||||||||||||
Interest income: | |||||||||||||||
Interest and fees on loans | $ | 14,243 | $ | 11,356 | $ | 27,256 | $ | 22,006 | |||||||
Interest and dividends on investments | 332 | 351 | 681 | 725 | |||||||||||
Interest on federal funds sold and cash equivalents | 305 | 63 | 448 | 135 | |||||||||||
Total interest income | 14,880 | 11,770 | 28,385 | 22,866 | |||||||||||
Interest expense: | |||||||||||||||
Interest on deposits | 2,620 | 1,547 | 4,573 | 3,012 | |||||||||||
Interest on borrowings | 665 | 420 | 1,196 | 795 | |||||||||||
Total interest expense | 3,285 | 1,967 | 5,769 | 3,807 | |||||||||||
Net interest income | 11,595 | 9,803 | 22,616 | 19,059 | |||||||||||
Provision for loan losses | 200 | 1,000 | 600 | 1,500 | |||||||||||
Net interest income after provision for loan losses | 11,395 | 8,803 | 22,016 | 17,559 | |||||||||||
Noninterest income: | |||||||||||||||
Gain on sale of SBA loans | 36 | 84 | 214 | 84 | |||||||||||
Loan fees | 409 | 175 | 560 | 241 | |||||||||||
Gain on Bank Owned Life Insurance | 153 | 163 | 303 | 323 | |||||||||||
Service fees on deposit accounts | 399 | 99 | 685 | 187 | |||||||||||
Loss on sale of OREO and valuation adjustments | (509 | ) | (389 | ) | (509 | ) | (395 | ) | |||||||
Other | 161 | 459 | 265 | 547 | |||||||||||
Total noninterest income | 649 | 591 | 1,518 | 987 | |||||||||||
Noninterest expense: | |||||||||||||||
Compensation and benefits | 1,953 | 1,692 | 3,907 | 3,593 | |||||||||||
Professional services | 418 | 382 | 792 | 747 | |||||||||||
Occupancy and equipment | 419 | 326 | 840 | 669 | |||||||||||
Data processing | 194 | 186 | 391 | 368 | |||||||||||
FDIC insurance | 92 | 71 | 169 | 142 | |||||||||||
OREO expense | 165 | 146 | 334 | 303 | |||||||||||
Other operating expense | 753 | 758 | 1,456 | 1,428 | |||||||||||
Total noninterest expense | 3,994 | 3,561 | 7,889 | 7,250 | |||||||||||
Income before income tax expense | 8,050 | 5,833 | 15,645 | 11,296 | |||||||||||
Income tax expense | 1,923 | 2,151 | 3,758 | 4,155 | |||||||||||
Net income attributable to Company and noncontrolling interest | 6,127 | 3,682 | 11,887 | 7,141 | |||||||||||
Net (income) loss attributable to noncontrolling interest | (16 | ) | 17 | (16 | ) | 18 | |||||||||
Net income attributable to Company | 6,111 | 3,699 | 11,871 | 7,159 | |||||||||||
Preferred stock dividend and discount accretion | 168 | 297 | 407 | 596 | |||||||||||
Net income available to common shareholders | $ | 5,943 | $ | 3,402 | $ | 11,464 | $ | 6,563 | |||||||
Earnings per common share: | |||||||||||||||
Basic | $ | 0.66 | $ | 0.41 | $ | 1.28 | $ | 0.79 | |||||||
Diluted | $ | 0.56 | $ | 0.34 | $ | 1.09 | $ | 0.66 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 9,044,159 | 8,335,041 | 8,933,820 | 8,328,093 | |||||||||||
Diluted | 10,909,130 | 10,913,227 | 10,909,294 | 10,901,965 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands) | |||||||||||||||
Net income | 6,127 | 3,682 | 11,887 | 7,141 | |||||||||||
Unrealized (losses) gains on investment securities: | |||||||||||||||
Non-credit related net unrealized gains (losses) on OTTI securities | — | 8 | — | 18 | |||||||||||
Unrealized (losses) gains on non-OTTI securities | (194 | ) | 144 | (844 | ) | 211 | |||||||||
Tax impact on unrealized gain (loss) | 47 | (61 | ) | 204 | (91 | ) | |||||||||
Reclassification of stranded tax effects | (27 | ) | — | (27 | ) | — | |||||||||
Total unrealized (losses) gains on investment securities | (174 | ) | 91 | (667 | ) | 138 | |||||||||
Comprehensive income | $ | 5,953 | $ | 3,773 | $ | 11,220 | $ | 7,279 | |||||||
Less: Comprehensive income attributable to noncontrolling interests | (16 | ) | 17 | (16 | ) | 18 | |||||||||
Comprehensive income attributable to the Company | $ | 5,937 | $ | 3,790 | $ | 11,204 | $ | 7,297 |
Preferred Stock | Shares of Common Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | Total Shareholders' Equity | Non-Controlling Interest | Total Equity | |||||||||||||||||||||||||||||
(in thousands except share data) | ||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2016 | $ | 20,000 | 7,147,952 | $ | 715 | $ | 62,300 | $ | 47,483 | $ | (349 | ) | $ | (3,015 | ) | $ | 127,134 | $ | (44 | ) | $ | 127,090 | ||||||||||||||||
Capital withdrawal by non-controlling interest | — | — | — | — | — | — | — | — | (53 | ) | (53 | ) | ||||||||||||||||||||||||||
Net income | — | — | — | — | 7,159 | — | — | 7,159 | (18 | ) | 7,141 | |||||||||||||||||||||||||||
Common stock options exercised | — | 7,260 | — | 232 | — | — | — | 232 | — | 232 | ||||||||||||||||||||||||||||
Preferred stock shares conversion | (172 | ) | 17,774 | 2 | 13 | — | — | — | (157 | ) | — | (157 | ) | |||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 138 | — | 138 | — | 138 | ||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | 36 | — | — | — | 36 | — | 36 | ||||||||||||||||||||||||||||
Stock dividend | — | 688,846 | 69 | 15,499 | (15,568 | ) | — | — | — | — | — | |||||||||||||||||||||||||||
Dividend on preferred stock | — | — | — | — | (596 | ) | — | — | (596 | ) | — | (596 | ) | |||||||||||||||||||||||||
Dividend on common stock | — | — | — | — | (1,599 | ) | — | — | (1,599 | ) | — | (1,599 | ) | |||||||||||||||||||||||||
Balance, June 30, 2017 | $ | 19,828 | 7,861,832 | $ | 786 | $ | 78,080 | $ | 36,879 | $ | (211 | ) | $ | (3,015 | ) | $ | 132,347 | $ | (115 | ) | $ | 132,232 | ||||||||||||||||
Balance, December 31, 2017 | $ | 15,971 | 8,301,497 | $ | 830 | $ | 81,940 | $ | 39,184 | $ | (130 | ) | $ | (3,015 | ) | $ | 134,780 | $ | — | $ | 134,780 | |||||||||||||||||
Retained earnings adjustment for stranded tax effects | — | — | — | — | 27 | — | — | 27 | — | 27 | ||||||||||||||||||||||||||||
Capital activity by non-controlling interest | — | — | — | — | — | — | — | — | 1,225 | 1,225 | ||||||||||||||||||||||||||||
Net income | — | — | — | — | 11,871 | — | — | 11,871 | 16 | 11,887 | ||||||||||||||||||||||||||||
Common stock options exercised | 5,406 | 1 | 40 | — | — | — | 41 | — | 41 | |||||||||||||||||||||||||||||
Preferred stock shares conversion | (6,776 | ) | 847,023 | 85 | 6,692 | — | — | — | 1 | — | 1 | |||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | (667 | ) | — | (667 | ) | — | (667 | ) | |||||||||||||||||||||||||
Stock compensation expense | 41 | — | 41 | — | 41 | |||||||||||||||||||||||||||||||||
Stock dividend | — | 802,284 | 80 | 16,153 | (16,236 | ) | — | — | (3 | ) | — | (3 | ) | |||||||||||||||||||||||||
Dividend on preferred stock | — | — | — | — | (407 | ) | — | — | (407 | ) | — | (407 | ) | |||||||||||||||||||||||||
Dividend on common stock | — | — | — | — | (2,283 | ) | — | — | (2,283 | ) | — | (2,283 | ) | |||||||||||||||||||||||||
Balance, June 30, 2018 | $ | 9,195 | 9,956,210 | $ | 996 | $ | 104,866 | $ | 32,156 | $ | (797 | ) | $ | (3,015 | ) | $ | 143,401 | $ | 1,241 | $ | 144,642 |
For the Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
(amounts in thousands) | |||||||
Cash Flows from Operating Activities: | |||||||
Net income | $ | 11,887 | $ | 7,141 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation of premises and equipment | 185 | 144 | |||||
Provision for loan losses | 600 | 1,500 | |||||
Increase in value of bank-owned life insurance | (303 | ) | (323 | ) | |||
Gain on sale of SBA loans | (214 | ) | (84 | ) | |||
SBA loans originated for sale | (3,075 | ) | (2,546 | ) | |||
Proceeds from sale of SBA loans originated for sale | 2,991 | 748 | |||||
Loss on sale of OREO and valuation adjustments | 509 | 395 | |||||
Net accretion of purchase premiums and discounts on securities | 27 | 33 | |||||
Stock based compensation | 41 | 36 | |||||
Deferred income tax benefit | — | 179 | |||||
Net changes in: | |||||||
Increase in accrued interest receivable and other assets | (897 | ) | (2,794 | ) | |||
Increase (decrease) in accrued interest payable and other accrued liabilities | 523 | (254 | ) | ||||
Net cash provided by operating activities | $ | 12,274 | $ | 4,175 | |||
Cash Flows from Investing Activities: | |||||||
Proceeds from sale and call of investment securities | 1,205 | — | |||||
Proceeds from maturities and principal payments on mortgage backed securities | 2,862 | 3,178 | |||||
Net increase in loans | (90,443 | ) | (77,217 | ) | |||
Purchases of bank premises and equipment | (124 | ) | (1,846 | ) | |||
Donated OREO property | — | (30 | ) | ||||
Sale of OREO, net | 1,638 | 1,500 | |||||
Redemptions(purchases) of restricted stock | 314 | (1,035 | ) | ||||
Net cash used in investing activities | $ | (84,548 | ) | $ | (75,450 | ) | |
Cash Flows from Financing Activities: | |||||||
Cash dividend payment | (2,407 | ) | (1,973 | ) | |||
Proceeds from exercise of stock options | 41 | 247 | |||||
Capital contribution (withdrawal) from non-controlling interest | 1,225 | (53 | ) | ||||
Net (decrease) increase in FHLBNY and short-term borrowings | (10,000 | ) | 20,000 | ||||
Net increase (decrease) in noninterest-bearing deposits | 86,313 | (12,179 | ) | ||||
Net increase in interest-bearing deposits | 65,200 | 14,013 | |||||
Net cash provided by financing activities | 140,372 | 20,055 | |||||
Net increase (decrease) in cash and cash equivalents | 68,098 | (51,220 | ) | ||||
Cash and Cash Equivalents, January 1, | 42,113 | 70,720 | |||||
Cash and Cash Equivalents, June 30, | $ | 110,211 | $ | 19,500 | |||
Supplemental Disclosure of Cash Flow Information: | |||||||
Cash paid during the year for: | |||||||
Interest on deposits and borrowed funds | $ | 5,384 | $ | 3,835 | |||
Income taxes | $ | 3,354 | $ | 5,654 | |||
Non-cash Investing and Financing Items | |||||||
Loans transferred to OREO | $ | 1,057 | $ | 59 | |||
As of June 30, 2018 | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||
(amounts in thousands) | |||||||||||||||
Available for sale: | |||||||||||||||
Corporate debt obligations | $ | 1,000 | $ | 28 | $ | — | $ | 1,028 | |||||||
Residential mortgage-backed securities | 34,213 | 62 | 1,142 | 33,133 | |||||||||||
Collateralized mortgage obligations | 73 | 1 | — | 74 | |||||||||||
Total available for sale | $ | 35,286 | $ | 91 | $ | 1,142 | $ | 34,235 | |||||||
Held to maturity: | |||||||||||||||
States and political subdivisions | $ | 1,086 | $ | 172 | $ | — | $ | 1,258 |
As of December 31, 2017 | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||
(amounts in thousands) | |||||||||||||||
Available for sale: | |||||||||||||||
Corporate debt obligations | $ | 1,000 | $ | 33 | $ | — | $ | 1,033 | |||||||
Residential mortgage-backed securities | 37,105 | 194 | 436 | 36,863 | |||||||||||
Collateralized mortgage obligations | 93 | 2 | — | 95 | |||||||||||
Total available for sale | $ | 38,198 | $ | 229 | $ | 436 | $ | 37,991 | |||||||
Held to maturity: | |||||||||||||||
States and political subdivisions | $ | 2,268 | $ | 200 | $ | — | $ | 2,468 |
Amortized Cost | Fair Value | ||||||
(amounts in thousands) | |||||||
Available for sale: | |||||||
Due within one year | $ | 6 | $ | 6 | |||
Due after one year through five years | 349 | 331 | |||||
Due after five years through ten years | 8,537 | 8,224 | |||||
Due after ten years | 26,394 | 25,674 | |||||
Total available for sale | $ | 35,286 | $ | 34,235 | |||
Held to maturity: | |||||||
Due within one year | $ | — | $ | — | |||
Due after one year through five years | — | — | |||||
Due after five years through ten years | 1,086 | 1,258 | |||||
Due after ten years | — | — | |||||
Total held to maturity | $ | 1,086 | $ | 1,258 |
As of June 30, 2018 | Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Description of Securities | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
(amounts in thousands) | ||||||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
Residential mortgage-backed securities | $ | 18,472 | $ | 412 | $ | 13,426 | $ | 730 | $ | 31,898 | $ | 1,142 | ||||||||||||
Total available for sale | $ | 18,472 | $ | 412 | $ | 13,426 | $ | 730 | $ | 31,898 | $ | 1,142 |
As of December 31, 2017 | Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Description of Securities | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
(amounts in thousands) | ||||||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
Residential mortgage-backed securities | $ | 2,729 | $ | 16 | $ | 15,117 | $ | 420 | $ | 17,846 | $ | 436 | ||||||||||||
Total available for sale | $ | 2,729 | $ | 16 | $ | 15,117 | $ | 420 | $ | 17,846 | $ | 436 |
June 30, 2018 | December 31, 2017 | ||||||
Amount | Amount | ||||||
(amounts in thousands) | |||||||
Commercial and Industrial | $ | 27,833 | $ | 38,972 | |||
Construction | 130,383 | 95,625 | |||||
Real Estate Mortgage: | |||||||
Commercial – Owner Occupied | 130,313 | 126,250 | |||||
Commercial – Non-owner Occupied | 272,277 | 270,472 | |||||
Residential – 1 to 4 Family | 475,702 | 416,317 | |||||
Residential – Multifamily | 49,349 | 47,832 | |||||
Consumer | 15,386 | 16,249 | |||||
Total Loans | $ | 1,101,243 | $ | 1,011,717 |
June 30, 2018 | 30-59 Days Past Due | 60-89 Days Past Due | Greater than 90 Days and Not Accruing | Total Past Due | Current | Total Loans | Loans > 90 Days and Accruing | ||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||||||
Commercial and Industrial | $ | — | $ | — | $ | 15 | $ | 15 | $ | 27,818 | $ | 27,833 | $ | — | |||||||||||||
Construction | — | — | 1,365 | 1,365 | 129,018 | 130,383 | — | ||||||||||||||||||||
Real Estate Mortgage: | |||||||||||||||||||||||||||
Commercial – Owner Occupied | — | — | 150 | 150 | 130,163 | 130,313 | — | ||||||||||||||||||||
Commercial – Non-owner Occupied | — | — | 277 | 277 | 272,000 | 272,277 | — | ||||||||||||||||||||
Residential – 1 to 4 Family | 504 | 1,419 | 1,923 | 473,779 | 475,702 | — | |||||||||||||||||||||
Residential – Multifamily | — | — | — | — | 49,349 | 49,349 | — | ||||||||||||||||||||
Consumer | 112 | — | — | 112 | 15,274 | 15,386 | — | ||||||||||||||||||||
Total Loans | $ | 112 | $ | 504 | $ | 3,226 | $ | 3,842 | $ | 1,097,401 | $ | 1,101,243 | $ | — |
December 31, 2017 | 30-59 Days Past Due | 60-89 Days Past Due | Greater than 90 Days and Not Accruing | Total Past Due | Current | Total Loans | Loans > 90 Days and Accruing | ||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||||||
Commercial and Industrial | $ | — | $ | — | $ | 17 | $ | 17 | $ | 38,955 | $ | 38,972 | $ | — | |||||||||||||
Construction | — | — | 1,392 | 1,392 | 94,233 | 95,625 | — | ||||||||||||||||||||
Real Estate Mortgage: | |||||||||||||||||||||||||||
Commercial – Owner Occupied | — | — | 155 | 155 | 126,095 | 126,250 | — | ||||||||||||||||||||
Commercial – Non-owner Occupied | — | — | 597 | 597 | 269,875 | 270,472 | — | ||||||||||||||||||||
Residential – 1 to 4 Family | — | 352 | 2,292 | 2,644 | 413,673 | 416,317 | — | ||||||||||||||||||||
Residential – Multifamily | — | — | — | — | 47,832 | 47,832 | — | ||||||||||||||||||||
Consumer | 92 | — | 81 | 173 | 16,076 | 16,249 | — | ||||||||||||||||||||
Total Loans | $ | 92 | $ | 352 | $ | 4,534 | $ | 4,978 | $ | 1,006,739 | $ | 1,011,717 | $ | — |
Real Estate Mortgage | |||||||||||||||||||||||||||||||
Commercial and Industrial | Construction | Commercial Owner Occupied | Commercial Non-owner Occupied | Residential 1 to 4 Family | Residential Multifamily | Consumer | Total | ||||||||||||||||||||||||
Allowance for loan losses | (amounts in thousands) | ||||||||||||||||||||||||||||||
Three months ended June 30, 2018 | |||||||||||||||||||||||||||||||
March 31, 2018 | $ | 555 | $ | 2,227 | $ | 1,991 | $ | 4,781 | $ | 6,644 | $ | 648 | $ | 235 | 17,081 | ||||||||||||||||
Charge-offs | — | (27 | ) | — | (49 | ) | — | — | (1 | ) | (77 | ) | |||||||||||||||||||
Recoveries | 10 | — | 5 | 50 | 4 | — | — | 69 | |||||||||||||||||||||||
Provisions | (26 | ) | (202 | ) | (35 | ) | 478 | 18 | (29 | ) | (4 | ) | 200 | ||||||||||||||||||
Ending Balance at June 30, 2018 | $ | 539 | $ | 1,998 | $ | 1,961 | $ | 5,260 | $ | 6,666 | $ | 619 | $ | 230 | $ | 17,273 | |||||||||||||||
Allowance for loan losses | |||||||||||||||||||||||||||||||
Six months ended June 30, 2018 | |||||||||||||||||||||||||||||||
December 31, 2017 | $ | 684 | $ | 2,068 | $ | 2,017 | $ | 4,630 | $ | 6,277 | $ | 627 | $ | 230 | 16,533 | ||||||||||||||||
Charge-offs | — | (27 | ) | — | (49 | ) | — | — | (18 | ) | (94 | ) | |||||||||||||||||||
Recoveries | 30 | — | 141 | 55 | 8 | — | — | 234 | |||||||||||||||||||||||
Provisions | (175 | ) | (43 | ) | (197 | ) | 624 | 381 | (8 | ) | 18 | 600 | |||||||||||||||||||
Ending Balance at June 30, 2018 | $ | 539 | $ | 1,998 | $ | 1,961 | $ | 5,260 | $ | 6,666 | $ | 619 | $ | 230 | $ | 17,273 | |||||||||||||||
Allowance for loan losses | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 15 | $ | 73 | $ | 51 | $ | 196 | $ | 14 | $ | — | $ | — | $ | 349 | |||||||||||||||
Collectively evaluated for impairment | 524 | 1,925 | 1,910 | 5,064 | 6,652 | 619 | 230 | 16,924 | |||||||||||||||||||||||
Balance at June 30, 2018 | $ | 539 | $ | 1,998 | $ | 1,961 | $ | 5,260 | $ | 6,666 | $ | 619 | $ | 230 | $ | 17,273 | |||||||||||||||
Loans | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 15 | $ | 5,780 | $ | 3,609 | $ | 11,829 | $ | 2,310 | $ | — | $ | — | $ | 23,543 | |||||||||||||||
Collectively evaluated for impairment | 27,818 | 124,603 | 126,704 | 260,448 | 473,392 | 49,349 | 15,386 | 1,077,700 | |||||||||||||||||||||||
Balance at June 30, 2018 | $ | 27,833 | $ | 130,383 | $ | 130,313 | $ | 272,277 | $ | 475,702 | $ | 49,349 | $ | 15,386 | $ | 1,101,243 |
Real Estate Mortgage | |||||||||||||||||||||||||||||||
Commercial and Industrial | Construction | Commercial Owner Occupied | Commercial Non-owner Occupied | Residential 1 to 4 Family | Residential Multifamily | Consumer | Total | ||||||||||||||||||||||||
Allowance for loan losses | (amounts in thousands) | ||||||||||||||||||||||||||||||
Three months ended June 30, 2017 | |||||||||||||||||||||||||||||||
March 31, 2017 | $ | 1,165 | $ | 2,169 | $ | 1,869 | $ | 4,240 | $ | 5,136 | $ | 662 | $ | 234 | 15,475 | ||||||||||||||||
Charge-offs | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Recoveries | 8 | — | 69 | 5 | 2 | — | — | 84 | |||||||||||||||||||||||
Provisions | 29 | 89 | (103 | ) | 670 | 284 | 37 | (6 | ) | 1,000 | |||||||||||||||||||||
Ending Balance at June 30, 2017 | $ | 1,202 | $ | 2,258 | $ | 1,835 | $ | 4,915 | $ | 5,422 | $ | 699 | $ | 228 | $ | 16,559 | |||||||||||||||
Allowance for loan losses | |||||||||||||||||||||||||||||||
Six months ended June 30, 2017 | |||||||||||||||||||||||||||||||
December 31, 2016 | $ | 1,188 | $ | 2,764 | $ | 2,082 | $ | 3,889 | $4,916 | $ | 505 | $ | 236 | $ | 15,580 | ||||||||||||||||
Charge-offs | (134 | ) | — | (430 | ) | — | (118 | ) | — | — | (682 | ) | |||||||||||||||||||
Recoveries | 42 | — | 69 | 45 | 5 | — | — | 161 | |||||||||||||||||||||||
Provisions | 106 | (506 | ) | 114 | 981 | 619 | 194 | (8 | ) | 1,500 | |||||||||||||||||||||
Ending Balance at June 30, 2017 | $ | 1,202 | $ | 2,258 | $ | 1,835 | $ | 4,915 | $ | 5,422 | $ | 699 | $ | 228 | $ | 16,559 | |||||||||||||||
Allowance for loan losses | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | — | $ | 810 | $ | 57 | $ | 906 | $ | 212 | $ | 50 | $ | — | $ | 2,035 | |||||||||||||||
Collectively evaluated for impairment | 1,202 | 1,448 | 1,778 | 4,009 | 5,210 | 649 | 228 | 14,524 | |||||||||||||||||||||||
Balance at June 30, 2017 | $ | 1,202 | $ | 2,258 | $ | 1,835 | $ | 4,915 | $ | 5,422 | $ | 699 | $ | 228 | $ | 16,559 | |||||||||||||||
Loans | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 19 | $ | 7,182 | $ | 3,971 | $ | 17,280 | $ | 4,124 | $ | 50 | $ | 90 | $ | 32,716 | |||||||||||||||
Collectively evaluated for impairment | 27,078 | 70,793 | 118,083 | 266,116 | 346,321 | 51,411 | 16,072 | 895,874 | |||||||||||||||||||||||
Balance at June 30, 2017 | $ | 27,097 | $ | 77,975 | $ | 122,054 | $ | 283,396 | $ | 350,445 | $ | 51,461 | $ | 16,162 | $ | 928,590 |
June 30, 2018 | Recorded Investment | Unpaid Principal Balance | Related Allowance | ||||||||
(amounts in thousands) | |||||||||||
With no related allowance recorded: | |||||||||||
Commercial and Industrial | $ | — | $ | — | $ | — | |||||
Construction | — | — | — | ||||||||
Real Estate Mortgage: | |||||||||||
Commercial – Owner Occupied | 150 | 150 | — | ||||||||
Commercial – Non-owner Occupied | 277 | 277 | — | ||||||||
Residential – 1 to 4 Family | 1,419 | 1,419 | — | ||||||||
Residential – Multifamily | — | — | — | ||||||||
Consumer | — | — | — | ||||||||
1,846 | 1,846 | — | |||||||||
With an allowance recorded: | |||||||||||
Commercial and Industrial | 15 | 20 | 15 | ||||||||
Construction | 5,780 | 10,269 | 73 | ||||||||
Real Estate Mortgage: | |||||||||||
Commercial – Owner Occupied | 3,459 | 3,489 | 51 | ||||||||
Commercial – Non-owner Occupied | 11,552 | 11,552 | 196 | ||||||||
Residential – 1 to 4 Family | 891 | 891 | 14 | ||||||||
Residential – Multifamily | — | — | — | ||||||||
Consumer | — | — | — | ||||||||
21,697 | 26,221 | 349 | |||||||||
Total: | |||||||||||
Commercial and Industrial | 15 | 20 | 15 | ||||||||
Construction | 5,780 | 10,269 | 73 | ||||||||
Real Estate Mortgage: | |||||||||||
Commercial – Owner Occupied | 3,609 | 3,639 | 51 | ||||||||
Commercial – Non-owner Occupied | 11,829 | 11,829 | 196 | ||||||||
Residential – 1 to 4 Family | 2,310 | 2,310 | 14 | ||||||||
Residential – Multifamily | — | — | — | ||||||||
Consumer | — | — | — | ||||||||
$ | 23,543 | $ | 28,067 | $ | 349 |
December 31, 2017 | Recorded Investment | Unpaid Principal Balance | Related Allowance | ||||||||
(amounts in thousands) | |||||||||||
With no related allowance recorded: | |||||||||||
Commercial and Industrial | $ | 17 | $ | 21 | $ | — | |||||
Construction | 1,365 | 5,856 | — | ||||||||
Real Estate Mortgage: | |||||||||||
Commercial – Owner Occupied | 155 | 155 | — | ||||||||
Commercial – Non-owner Occupied | 277 | 277 | — | ||||||||
Residential – 1 to 4 Family | 2,292 | 2,354 | — | ||||||||
Residential – Multifamily | — | — | — | ||||||||
Consumer | 81 | 81 | — | ||||||||
4,187 | 8,744 | — | |||||||||
With an allowance recorded: | |||||||||||
Commercial and Industrial | — | — | — | ||||||||
Construction | 4,587 | 4,684 | 135 | ||||||||
Real Estate Mortgage: | |||||||||||
Commercial – Owner Occupied | 3,635 | 3,665 | 58 | ||||||||
Commercial – Non-owner Occupied | 12,124 | 13,941 | 250 | ||||||||
Residential – 1 to 4 Family | 919 | 919 | 15 | ||||||||
Residential – Multifamily | — | — | — | ||||||||
Consumer | — | — | — | ||||||||
21,265 | 23,209 | 458 | |||||||||
Total: | |||||||||||
Commercial and Industrial | 17 | 21 | — | ||||||||
Construction | 5,952 | 10,540 | 135 | ||||||||
Real Estate Mortgage: | |||||||||||
Commercial – Owner Occupied | 3,790 | 3,820 | 58 | ||||||||
Commercial – Non-owner Occupied | 12,401 | 14,218 | 250 | ||||||||
Residential – 1 to 4 Family | 3,211 | 3,273 | 15 | ||||||||
Residential – Multifamily | — | — | — | ||||||||
Consumer | 81 | 81 | — | ||||||||
$ | 25,452 | $ | 31,953 | $ | 458 |
Three Months Ended June 30, | |||||||||||||||
2018 | 2017 | ||||||||||||||
Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | ||||||||||||
(amounts in thousands) | |||||||||||||||
Commercial and Industrial | $ | 16 | $ | 1 | $ | 23 | $ | — | |||||||
Construction | 5,839 | 49 | 9,158 | 51 | |||||||||||
Real Estate Mortgage: | |||||||||||||||
Commercial – Owner Occupied | 3,654 | 48 | 4,024 | 40 | |||||||||||
Commercial – Non-owner Occupied | 11,917 | 148 | 18,483 | 155 | |||||||||||
Residential – 1 to 4 Family | 2,750 | 13 | 4,179 | 22 | |||||||||||
Residential – Multifamily | — | — | 180 | — | |||||||||||
Consumer | — | — | 90 | 1 | |||||||||||
Total | $ | 24,176 | $ | 259 | $ | 36,137 | $ | 269 |
Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | ||||||||||||||
Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | ||||||||||||
(amounts in thousands) | |||||||||||||||
Commercial and Industrial | $ | 16 | $ | 1 | $ | 23 | $ | 1 | |||||||
Construction | 5,876 | 97 | 8,535 | 102 | |||||||||||
Real Estate Mortgage: | |||||||||||||||
Commercial – Owner Occupied | 3,699 | 96 | 4,054 | 97 | |||||||||||
Commercial – Non-owner Occupied | 12,078 | 296 | 18,248 | 328 | |||||||||||
Residential – 1 to 4 Family | 2,903 | 27 | 4,185 | 42 | |||||||||||
Residential – Multifamily | — | — | 223 | — | |||||||||||
Consumer | 27 | — | 90 | 2 | |||||||||||
Total | $ | 24,599 | $ | 517 | $ | 35,358 | $ | 572 |
• | Whether there is a period of current payment history under the current terms, typically 6 months; |
• | Whether the loan is current at the time of restructuring; and |
• | Whether we expect the loan to continue to perform under the restructured terms with a debt coverage ratio that complies with the Bank’s credit underwriting policy of 1.25 times debt service. |
1. | Good: Borrower exhibits the strongest overall financial condition and represents the most creditworthy profile. |
2. | Satisfactory (A): Borrower reflects a well-balanced financial condition, demonstrates a high level of creditworthiness and typically will have a strong banking relationship with the Bank. |
3. | Satisfactory (B): Borrower exhibits a balanced financial condition and does not expose the Bank to more than a normal or average overall amount of risk. Loans are considered fully collectable. |
4. | Watch List: Borrower reflects a fair financial condition, but there exists an overall greater than average risk. Risk is deemed acceptable by virtue of increased monitoring and control over borrowings. Probability of timely repayment is present. |
5. | Other Assets Especially Mentioned (OAEM): Financial condition is such that assets in this category have a potential weakness or pose unwarranted financial risk to the Bank even though the asset value is not currently impaired. The asset does not currently warrant adverse classification but if not corrected could weaken and could create future increased risk exposure. Includes loans that require an increased degree of monitoring or servicing as a result of internal or external changes. |
6. | Substandard: This classification represents more severe cases of #5 (OAEM) characteristics that require increased monitoring. Assets are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Assets are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral. Asset has a well-defined weakness or weaknesses that impairs the ability to repay debt and jeopardizes the timely liquidation or realization of the collateral at the asset’s net book value. |
7. | Doubtful: Assets which have all the weaknesses inherent in those assets classified #6 (Substandard) but the risks are more severe relative to financial deterioration in capital and/or asset value; accounting/evaluation techniques may be questionable and the overall possibility for collection in full is highly improbable. Borrowers in this category require constant monitoring, are considered work-out loans and present the potential for future loss to the Bank. |
At June 30, 2018 | Pass | OAEM | Substandard | Doubtful | Total | ||||||||||||||
(amounts in thousands) | |||||||||||||||||||
Commercial and Industrial | $ | 27,748 | $ | 85 | $ | — | $ | — | $ | 27,833 | |||||||||
Construction | 116,207 | 6,185 | 7,991 | — | 130,383 | ||||||||||||||
Real Estate Mortgage: | |||||||||||||||||||
Commercial – Owner Occupied | 127,709 | 2,454 | 150 | — | 130,313 | ||||||||||||||
Commercial – Non-owner Occupied | 271,863 | — | 414 | — | 272,277 | ||||||||||||||
Residential – 1 to 4 Family | 473,379 | 775 | 1,548 | — | 475,702 | ||||||||||||||
Residential – Multifamily | 49,349 | — | — | — | 49,349 | ||||||||||||||
Consumer | 15,370 | 16 | — | — | 15,386 | ||||||||||||||
Total | $ | 1,081,625 | $ | 9,515 | $ | 10,103 | $ | — | $ | 1,101,243 |
At December 31, 2017 | Pass | OAEM | Substandard | Doubtful | Total | ||||||||||||||
(amounts in thousands) | |||||||||||||||||||
Commercial and Industrial | $ | 38,875 | $ | 97 | $ | — | $ | — | $ | 38,972 | |||||||||
Construction | 82,351 | 5,056 | 8,218 | — | 95,625 | ||||||||||||||
Real Estate Mortgage: | |||||||||||||||||||
Commercial – Owner Occupied | 123,491 | 2,604 | 155 | — | 126,250 | ||||||||||||||
Commercial – Non-owner Occupied | 269,736 | — | 736 | — | 270,472 | ||||||||||||||
Residential – 1 to 4 Family | 413,327 | 560 | 2,430 | — | 416,317 | ||||||||||||||
Residential – Multifamily | 47,832 | — | — | — | 47,832 | ||||||||||||||
Consumer | 16,168 | — | 81 | — | 16,249 | ||||||||||||||
Total | $ | 991,780 | $ | 8,317 | $ | 11,620 | $ | — | $ | 1,011,717 |
For the Three Months Ended June 30, | |||||||
2018 | 2017 | ||||||
(amounts in thousands) | |||||||
Investment securities: | |||||||
Non-credit related net unrealized gains (losses) on OTTI securities | $ | — | $ | 8 | |||
Unrealized gains (losses) on non-OTTI securities | (194 | ) | 144 | ||||
Tax impact on unrealized gain (loss) | 47 | (61 | ) | ||||
Reclassification of stranded tax effects | (27 | ) | — | ||||
Other comprehensive income (loss) | $ | (174 | ) | $ | 91 |
For the Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
(amounts in thousands) | |||||||
Investment securities: | |||||||
Non-credit related net unrealized gains (losses) on OTTI securities | $ | — | $ | 18 | |||
Unrealized gains (losses) on non-OTTI securities | (844 | ) | 211 | ||||
Tax impact on unrealized gain (loss) | 204 | (91 | ) | ||||
Reclassification of stranded tax effects | (27 | ) | — | ||||
Other comprehensive income (loss) | $ | (667 | ) | $ | 138 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands except share and per share data) | |||||||||||||||
Basic earnings per share | |||||||||||||||
Net income | $ | 6,111 | $ | 3,699 | $ | 11,871 | $ | 7,159 | |||||||
Less: Dividend on series B preferred stock | 168 | 297 | 407 | 596 | |||||||||||
Net income attributable to common shares | $ | 5,943 | $ | 3,402 | $ | 11,464 | $ | 6,563 | |||||||
Basic weighted-average common shares outstanding | 9,044,159 | 8,335,041 | 8,933,820 | 8,328,093 | |||||||||||
Basic earnings per common share | $ | 0.66 | $ | 0.41 | $ | 1.28 | $ | 0.79 | |||||||
Diluted earnings per share | |||||||||||||||
Net income attributable to common shares | $ | 5,943 | $ | 3,402 | $ | 11,464 | $ | 6,563 | |||||||
Add: Dividend on series B preferred stock | 168 | 297 | 407 | 596 | |||||||||||
Net income attributable to diluted common shares | $ | 6,111 | $ | 3,699 | $ | 11,871 | $ | 7,159 | |||||||
Basic weighted-average common shares outstanding | 9,044,159 | 8,335,041 | 8,933,820 | 8,328,093 | |||||||||||
Dilutive potential common shares | 1,864,971 | 2,578,186 | 1,975,474 | 2,573,872 | |||||||||||
Diluted weighted-average common shares outstanding | 10,909,130 | 10,913,227 | 10,909,294 | 10,901,965 | |||||||||||
Diluted earnings per common share | $ | 0.56 | $ | 0.34 | $ | 1.09 | $ | 0.66 | |||||||
1) | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
1) | Quoted prices for similar assets or liabilities in active markets. |
2) | Quoted prices for identical or similar assets or liabilities in markets that are not active. |
3) | Inputs other than quoted prices that are observable, either directly or indirectly, for the term of the asset or liability (e.g., interest rates, yield curves, credit risks, prepayment speeds or volatilities) or “market corroborated inputs.” |
1) | Prices or valuation techniques that require inputs that are both unobservable (i.e. supported by little or no market activity) and that are significant to the fair value of the assets or liabilities. |
2) | These assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. |
Financial Assets | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(amounts in thousands) | ||||||||||||||||
Investment securities and loan available for sale | ||||||||||||||||
As of June 30, 2018 | ||||||||||||||||
Corporate debt obligations | $ | — | $ | 1,028 | $ | — | $ | 1,028 | ||||||||
Residential mortgage-backed securities | — | 33,133 | — | 33,133 | ||||||||||||
Collateralized mortgage-backed securities | — | 74 | — | 74 | ||||||||||||
SBA loans available for sale | — | 1,839 | — | 1,839 | ||||||||||||
Total | $ | — | $ | 36,074 | $ | — | $ | 36,074 | ||||||||
As of December 31, 2017 | ||||||||||||||||
Corporate debt obligations | $ | — | $ | 1,033 | $ | — | $ | 1,033 | ||||||||
Residential mortgage-backed securities | — | 36,863 | — | 36,863 | ||||||||||||
Collateralized mortgage-backed securities | — | 95 | — | 95 | ||||||||||||
SBA loans available for sale | — | 1,541 | — | 1,541 | ||||||||||||
Total | $ | — | $ | 39,532 | $ | — | $ | 39,532 |
Investment Securities and Loan Available for Sale | |||||||
Three months ended | June 30, 2018 | June 30, 2017 | |||||
(amounts in thousands) | |||||||
Beginning balance | $ | — | $ | 428 | |||
Total net losses included in: | |||||||
Settlements | — | (7 | ) | ||||
Ending balance | $ | — | $ | 421 |
Investment Securities and Loan Available for Sale | |||||||
Six months ended | June 30, 2018 | June 30, 2017 | |||||
(amounts in thousands) | |||||||
Beginning balance | $ | — | $ | 437 | |||
Total net losses included in: | |||||||
Settlements | — | (16 | ) | ||||
Ending balance | $ | — | $ | 421 |
Financial Assets | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(amounts in thousands) | ||||||||||||||||
As of June 30, 2018 | ||||||||||||||||
Collateral-dependent impaired loans | $ | — | $ | — | $ | 7,553 | $ | 7,553 | ||||||||
OREO | — | — | 6,158 | 6,158 | ||||||||||||
As of December 31, 2017 | ||||||||||||||||
Collateral-dependent impaired loans | $ | — | $ | — | $ | 9,093 | $ | 9,093 | ||||||||
OREO | — | — | 7,248 | 7,248 |
June 30, 2018 | Carrying Amount | Fair Value | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||
(amounts in thousands) | |||||||||||||||||||
Financial Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 110,211 | $ | 110,211 | $ | 110,211 | $ | — | $ | — | |||||||||
Investment securities AFS | 34,235 | 34,235 | — | 34,235 | — | ||||||||||||||
Investment securities HTM | 1,086 | 1,258 | — | 1,258 | — | ||||||||||||||
Restricted stock | 5.858 | 5,858 | — | 5,858 | — | ||||||||||||||
Loans held for sale | 1.839 | 1,839 | — | 1,839 | — | ||||||||||||||
Loans, net | 1,083,970 | 1,069,310 | — | 1,046,116 | 23,194 | ||||||||||||||
Accrued interest receivable | 4,271 | 4,271 | — | 4,271 | — | ||||||||||||||
Financial Liabilities: | |||||||||||||||||||
Non-time deposits | 583,741 | 583,741 | — | 583,741 | — | ||||||||||||||
Time deposits | 434,155 | 435,684 | — | 435,684 | — | ||||||||||||||
Borrowings | 118,053 | 117,967 | — | 117,967 | — | ||||||||||||||
Accrued interest payable | 1,116 | 1,116 | — | 1,116 | — |
December 31, 2017 | Carrying Amount | Fair Value | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||
(amounts in thousands) | |||||||||||||||||||
Financial Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 42,113 | $ | 42,113 | $ | 42,113 | $ | — | $ | — | |||||||||
Investment securities AFS | 37,991 | 37,991 | — | 37,991 | — | ||||||||||||||
Investment securities HTM | 2,268 | 2,468 | — | 2,468 | — | ||||||||||||||
Restricted stock | 6,172 | 6,172 | — | 6,172 | — | ||||||||||||||
Loans held for sale | 1,541 | 1,541 | — | 1,541 | — | ||||||||||||||
Loans, net | 995,184 | 1,001,655 | — | 976,660 | 24,995 | ||||||||||||||
Accrued interest receivable | 4,025 | 4,025 | — | 4,025 | — | ||||||||||||||
Financial Liabilities: | |||||||||||||||||||
Non-time deposits | $ | 498,522 | $ | 498,522 | $ | — | $ | 498,522 | $ | — | |||||||||
Time deposits | 367,861 | 368,863 | — | 368,863 | — | ||||||||||||||
Borrowings | 128,053 | 127,552 | — | 127,552 | — | ||||||||||||||
Accrued interest payable | 719 | 719 | — | 719 | — |
Regulatory Capital Compliance | |||||||||||||||||||||||||||
As of June 30, 2018 | Actual | For Capital Adequacy Purposes | For Capital Adequacy Purposes With Capital Conservation Buffer* | To be Well Capitalized Under Prompt Corrective Action Provisions | |||||||||||||||||||||||
(amounts in thousands except ratios) | Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
Company: | |||||||||||||||||||||||||||
Total risk-based capital | $ | 174,520 | 16.75 | % | $ | 83,333 | 8.00 | % | $ | 102,864 | 9.875 | % | $ | 104,166 | 10.00 | % | |||||||||||
Tier 1 risk-based capital | 161,453 | 15.50 | % | 62,500 | 6.00 | % | 82,031 | 7.875 | % | 83,333 | 8.00 | % | |||||||||||||||
Tier 1 leverage | 161,453 | 13.56 | % | 47,626 | 4.00 | % | 47,626 | 4.000 | % | 59,533 | 5.00 | % | |||||||||||||||
Tier 1 common equity | 139,258 | 13.37 | % | 46,875 | 4.50 | % | 66,406 | 6.375 | % | 67,708 | 6.50 | % | |||||||||||||||
Parke Bank: | |||||||||||||||||||||||||||
Total risk-based capital | $ | 171,118 | 16.43 | % | $ | 83,333 | 8.00 | % | $ | 102,864 | 9.875 | % | $ | 104,166 | 10.00 | % | |||||||||||
Tier 1 risk-based capital | 158,051 | 15.17 | % | 62,500 | 6.00 | % | 82,031 | 7.875 | % | 83,333 | 8.00 | % | |||||||||||||||
Tier 1 leverage | 158,051 | 13.27 | % | 47,626 | 4.00 | % | 47,626 | 4.000 | % | 59,533 | 5.00 | % | |||||||||||||||
Tier 1 common equity | 158,051 | 15.17 | % | 46,875 | 4.50 | % | 66,406 | 6.375 | % | 67,708 | 6.50 | % |
As of December 31, 2017 | Actual | For Capital Adequacy Purposes | For Capital Adequacy Purposes With Capital Conservation Buffer* | To be Well Capitalized Under Prompt Corrective Action Provisions | |||||||||||||||||||||||
(amounts in thousands except ratios) | Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
Company: | |||||||||||||||||||||||||||
Total risk-based capital | $ | 162,837 | 17.17 | % | $ | 75,859 | 8.00 | % | $ | 87,711 | 9.25 | % | $ | 94,823 | 10.00 | % | |||||||||||
Tier 1 risk-based capital | 150,926 | 15.92 | % | 56,894 | 6.00 | % | 68,747 | 7.25 | % | 75,859 | 8.00 | % | |||||||||||||||
Tier 1 leverage | 150,926 | 14.31 | % | 42,178 | 4.00 | % | 42,178 | 4.00 | % | 52,722 | 5.00 | % | |||||||||||||||
Tier 1 common equity | 121,955 | 12.86 | % | 42,670 | 4.50 | % | 54,523 | 5.75 | % | 61,635 | 6.50 | % | |||||||||||||||
Parke Bank: | |||||||||||||||||||||||||||
Total risk-based capital | $ | 159,435 | 16.81 | % | $ | 75,861 | 8.00 | % | $ | 87,714 | 9.25 | % | $ | 94,826 | 10.00 | % | |||||||||||
Tier 1 risk-based capital | 147,524 | 15.56 | % | 56,896 | 6.00 | % | 68,749 | 7.25 | % | 75,861 | 8.00 | % | |||||||||||||||
Tier 1 leverage | 147,524 | 13.99 | % | 42,175 | 4.00 | % | 42,175 | 4.00 | % | 52,719 | 5.00 | % | |||||||||||||||
Tier 1 common equity | 147,524 | 15.56 | % | 42,672 | 4.50 | % | 54,525 | 5.75 | % | 61,637 | 6.50 | % |
For the Three Months Ended June 30, | |||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||
Average Balance | Interest Income/ Expense | Yield/ Cost | Average Balance | Interest Income/ Expense | Yield/ Cost | ||||||||||||||||
(amounts in thousands, except percentages) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Loans | $ | 1,071,733 | $ | 14,243 | 5.33 | % | $ | 904,487 | $ | 11,356 | 5.04 | % | |||||||||
Investment securities | 42,182 | 332 | 3.16 | % | 50,143 | 351 | 2.81 | % | |||||||||||||
Federal funds sold and cash equivalents | 73,178 | 305 | 1.67 | % | 28,210 | 63 | 0.90 | % | |||||||||||||
Total interest-earning assets | 1,187,093 | $ | 14,880 | 5.03 | % | 982,840 | $ | 11,770 | 4.80 | % | |||||||||||
Other assets | 60,068 | 64,148 | |||||||||||||||||||
Allowance for loan losses | (17,295 | ) | (15,835 | ) | |||||||||||||||||
Total assets | $ | 1,229,866 | $ | 1,031,153 | |||||||||||||||||
Liabilities and Shareholders’ Equity | |||||||||||||||||||||
Interest bearing deposits: | |||||||||||||||||||||
NOWs | $ | 52,953 | $ | 66 | 0.50 | % | $ | 39,321 | $ | 48 | 0.49 | % | |||||||||
Money markets | 170,394 | 655 | 1.54 | % | 129,839 | 230 | 0.71 | % | |||||||||||||
Savings | 157,383 | 208 | 0.53 | % | 186,015 | 246 | 0.53 | % | |||||||||||||
Time deposits | 307,820 | 1,141 | 1.49 | % | 284,286 | 812 | 1.15 | % | |||||||||||||
Brokered certificates of deposit | 108,942 | 550 | 2.02 | % | 78,511 | 211 | 1.08 | % | |||||||||||||
Total interest-bearing deposits | 797,492 | 2,620 | 1.32 | % | 717,972 | 1,547 | 0.86 | % | |||||||||||||
Borrowings | 120,800 | 665 | 2.21 | % | 99,866 | 420 | 1.69 | % | |||||||||||||
Total interest-bearing liabilities | 918,292 | 3,285 | 1.43 | % | 817,838 | 1,967 | 0.96 | % | |||||||||||||
Non-interest bearing deposits | 160,943 | 75,024 | |||||||||||||||||||
Other liabilities | 7,395 | 5,988 | |||||||||||||||||||
Total non-interest bearing liabilities | 168,338 | 81,012 | |||||||||||||||||||
Equity | 143,236 | 132,303 | |||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,229,866 | $ | 1,031,153 | |||||||||||||||||
Net interest income | $ | 11,595 | $ | 9,803 | |||||||||||||||||
Interest rate spread | 3.60 | % | 3.84 | % | |||||||||||||||||
Net interest margin | 3.92 | % | 4.00 | % |
For the Six Months Ended June 30, | |||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||
Average Balance | Interest Income/ Expense | Yield/ Cost | Average Balance | Interest Income/ Expense | Yield/ Cost | ||||||||||||||||
(amounts in thousands, except percentages) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Loans | $ | 1,047,924 | $ | 27,256 | 5.25 | % | $ | 887,093 | $ | 22,006 | 5.00 | % | |||||||||
Investment securities | 43,318 | 681 | 3.17 | % | 50,580 | 725 | 2.89 | % | |||||||||||||
Federal funds sold and cash equivalents | 57,002 | 448 | 1.58 | % | 29,890 | 135 | 0.91 | % | |||||||||||||
Total interest-earning assets | 1,148,244 | 28,385 | 4.99 | % | 967,563 | 22,866 | 4.77 | % | |||||||||||||
Other assets | 59,067 | 62,441 | |||||||||||||||||||
Allowance for loan losses | (17,079 | ) | (15,814 | ) | |||||||||||||||||
Total assets | $ | 1,190,232 | $ | 1,014,190 | |||||||||||||||||
Liabilities and Shareholders’ Equity | |||||||||||||||||||||
Interest bearing deposits: | |||||||||||||||||||||
NOWs | $ | 53,430 | $ | 126 | 0.48 | % | $ | 39,117 | $ | 100 | 0.52 | % | |||||||||
Money markets | 161,343 | 1,086 | 1.36 | % | 129,992 | 418 | 0.65 | % | |||||||||||||
Savings | 164,695 | 434 | 0.53 | % | 184,074 | 483 | 0.53 | % | |||||||||||||
Time deposits | 294,805 | 2,013 | 1.38 | % | 288,135 | 1,649 | 1.15 | % | |||||||||||||
Brokered certificates of deposit | 99,801 | 914 | 1.85 | % | 72,273 | 362 | 1.01 | % | |||||||||||||
Total interest-bearing deposits | 774,074 | 4,573 | 1.19 | % | 713,591 | 3,012 | 0.85 | % | |||||||||||||
Borrowings | 119,793 | 1,196 | 2.01 | % | 96,478 | 795 | 1.66 | % | |||||||||||||
Total interest-bearing liabilities | 893,867 | 5,769 | 1.30 | % | 810,069 | 3,807 | 0.95 | % | |||||||||||||
Non-interest bearing deposits | 148,742 | 67,322 | |||||||||||||||||||
Other liabilities | 7,187 | 6,018 | |||||||||||||||||||
Total non-interest bearing liabilities | 155,929 | 73,340 | |||||||||||||||||||
Equity | 140,436 | 130,781 | |||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,190,232 | $ | 1,014,190 | |||||||||||||||||
Net interest income | $ | 22,616 | $ | 19,059 | |||||||||||||||||
Interest rate spread | 3.69 | % | 3.82 | % | |||||||||||||||||
Net interest margin | 3.97 | % | 3.97 | % |
June 30, 2018 | December 31, 2017 | ||||
(Amounts in thousands) | |||||
Cash and cash equivalents | 110,211 | 42,113 | |||
Investment securities | 35,321 | 40,259 | |||
Loans held for sale | 1,839 | 1,541 | |||
Loans, net of unearned income | 1,101,243 | 1,011,717 | |||
Allowance for loan losses | (17,273 | ) | (16,533 | ) | |
Total assets | 1,289,635 | 1,137,452 | |||
Total deposits | 1,017,896 | 866,383 | |||
FHLBNY borrowings | 104,650 | 114,650 | |||
Subordinated debt | 13,403 | 13,403 | |||
Total liabilities | 1,144,993 | 1,002,672 | |||
Total equity | 144,642 | 134,780 | |||
Total liabilities and equity | 1,289,635 | 1,137,452 |
June 30, 2018 | December 31, 2017 | |||||||||||
Amount | Percentage of Loans to total Loans | Amount | Percentage of Loans to total Loans | |||||||||
Commercial and Industrial | $ | 27,833 | 2.5 | % | $ | 38,972 | 3.9 | % | ||||
Construction | 130,383 | 11.9 | % | 95,625 | 9.5 | % | ||||||
Real Estate Mortgage: | ||||||||||||
Commercial – Owner Occupied | 130,313 | 11.8 | % | 126,250 | 12.5 | % | ||||||
Commercial – Non-owner Occupied | 272,277 | 24.7 | % | 270,472 | 26.7 | % | ||||||
Residential – 1 to 4 Family | 475,702 | 43.2 | % | 416,317 | 41.1 | % | ||||||
Residential – Multifamily | 49,349 | 4.5 | % | 47,832 | 4.7 | % | ||||||
Consumer | 15,386 | 1.4 | % | 16,249 | 1.6 | % | ||||||
Total Loans | $ | 1,101,243 | 100.00 | % | $ | 1,011,717 | 100.00 | % |
June 30, | December 31, | ||||||
2018 | 2017 | ||||||
(amounts in thousands) | |||||||
Noninterest-bearing | $ | 210,669 | $ | 124,356 | |||
Interest-bearing | |||||||
Checking | 50,100 | 51,629 | |||||
Savings | 151,950 | 173,226 | |||||
Money market | 171,022 | 149,311 | |||||
Time deposits | 434,155 | 367,861 | |||||
Total deposits | $ | 1,017,896 | $ | 866,383 |
Six months ended | |||||||
2018 | 2017 | ||||||
(amounts in thousands) | |||||||
Balance at the beginning of the period | $ | 16,533 | $ | 15,580 | |||
Charge-offs: | |||||||
Commercial and Industrial | — | (134 | ) | ||||
Construction: | (27 | ) | — | ||||
Real Estate Mortgage: | |||||||
Commercial – Owner Occupied | — | (430 | ) | ||||
Commercial – Non-owner Occupied | (49 | ) | — | ||||
Residential – 1 to 4 Family | — | (118 | ) | ||||
Residential – Multifamily | — | — | |||||
Consumer | (18 | ) | — | ||||
Total charge - offs | $ | (94 | ) | $ | (682 | ) | |
Recoveries: | |||||||
Commercial and Industrial | 30 | 42 | |||||
Construction: | — | — | |||||
Real Estate Mortgage: | |||||||
Commercial – Owner Occupied | 141 | 69 | |||||
Commercial – Non-owner Occupied | 55 | 45 | |||||
Residential – 1 to 4 Family | 8 | 5 | |||||
Residential – Multifamily | — | — | |||||
Consumer | — | — | |||||
Total recoveries | $ | 234 | $ | 161 | |||
Net recoveries (charge-offs) | 140 | (521 | ) | ||||
Provisions for loan and lease losses | 600 | 1,500 | |||||
Balance at the end of the period | $ | 17,273 | $ | 16,559 |
June 30, 2018 | 30-59 Days Past Due | 60-89 Days Past Due | Greater than 90 Days and Not Accruing (NPL) | Greater than 90 Days and Accruing | Current | Total Loans | NPL to Loan Type % | |||||||||||||||||||
(amounts in thousands except ratios) | ||||||||||||||||||||||||||
Commercial and Industrial | $ | — | $ | — | $ | 15 | $ | — | $ | 27,818 | $ | 27,833 | 0.05 | % | ||||||||||||
Construction | — | — | 1,365 | — | $ | 129,018 | 130,383 | 1.05 | % | |||||||||||||||||
Real Estate Mortgage: | ||||||||||||||||||||||||||
Commercial – Owner Occupied | — | — | 150 | — | $ | 130,163 | 130,313 | 0.12 | % | |||||||||||||||||
Commercial – Non-owner Occupied | — | — | 277 | — | $ | 272,000 | 272,277 | 0.10 | % | |||||||||||||||||
Residential – 1 to 4 Family | 504 | 1,419 | — | $ | 473,779 | 475,702 | 0.30 | % | ||||||||||||||||||
Residential – Multifamily | — | — | — | — | $ | 49,349 | 49,349 | — | % | |||||||||||||||||
Consumer | 112 | — | — | — | $ | 15,274 | 15,386 | — | % | |||||||||||||||||
Total Loans | $ | 112 | $ | 504 | $ | 3,226 | $ | — | $ | 1,097,401 | $ | 1,101,243 | 0.29 | % |
For the six months ended | |||||||
June 30, | |||||||
2018 | 2017 | ||||||
(amounts in thousands) | |||||||
Balance at beginning of period | $ | 7,248 | $ | 10,528 | |||
Real estate acquired in settlement of loans | 1,057 | 59 | |||||
Sales of OREO, net | (1,638 | ) | (1,500 | ) | |||
Loss on sale of OREO and valuation adjustments | (509 | ) | (395 | ) | |||
Balance at end of period | $ | 6,158 | $ | 8,692 |
Amount | Ratio | Amount | Ratio | ||||||||||
(amounts in thousands except ratios) | |||||||||||||
Company | Parke Bank | ||||||||||||
Total risk-based capital | $ | 174,520 | 16.75 | % | $ | 171,118 | 16.43 | % | |||||
Tier 1 risk-based capital | 161,453 | 15.50 | % | 158,051 | 15.17 | % | |||||||
Tier 1 leverage | 161,453 | 13.56 | % | 158,051 | 13.27 | % | |||||||
Tier 1 common equity | 139,258 | 13.37 | % | 158,051 | 15.17 | % |
As of June 30, 2018: | (Dollars in thousands except % change data) | |||||||||||
Basis point change in rates | -200 | Base Forecast | 200 | |||||||||
Net Interest Income at Risk: | ||||||||||||
Net Interest Income | $ | 50,173 | $ | 49,052 | $ | 49,467 | ||||||
% change | 2.29 | % | 0.85 | % | ||||||||
Economic Value at Risk: | ||||||||||||
Equity | $ | 205,762 | $ | 174,698 | $ | 152,926 | ||||||
% change | 17.78 | % | (12.46 | )% |
31.1 | |
31.2 | |
32 | |
101.INS | XBRL Instance Document * |
101.SCH | XBRL Schema Document * |
101.CAL | XBRL Calculation Linkbase Document * |
101.LAB | XBRL Labels Linkbase Document * |
101.PRE | XBRL Presentation Linkbase Document * |
101.DEF | XBRL Definition Linkbase Document * |
PARKE BANCORP, INC. | ||
Date: | August 9, 2018 | /s/ Vito S. Pantilione |
Vito S. Pantilione | ||
President and Chief Executive Officer (Principal Executive Officer) | ||
Date: | August 9, 2018 | /s/ John F. Hawkins |
John F. Hawkins | ||
Senior Vice President and Chief Financial Officer (Principal Accounting Officer) |
1. | I have reviewed this Form 10-Q of Parke Bancorp, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 9, 2018 | /s/ Vito S. Pantilione |
Vito S. Pantilione | ||
President and Chief Executive Officer |
1. | I have reviewed this Form 10-Q of Parke Bancorp, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 9, 2018 | /s/ John F. Hawkins |
John F. Hawkins | ||
Senior Vice President and Chief Financial Officer |
/s/ Vito S. Pantilione | /s/ John F. Hawkins | |
Vito S. Pantilione | John F. Hawkins | |
President and Chief Executive Officer | Senior Vice President and Chief Financial Officer | |
(Principal Executive Officer) | (Principal Financial Officer) |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 31, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | PARKE BANCORP, INC. | |
Entity Central Index Key | 0001315399 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 9,774,221 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 |
Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Assets | ||
Investment securities held to maturity, fair value | $ 1,258 | $ 2,468 |
Equity | ||
Preferred stock, liquidation value per share (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, outstanding (in shares) | 9,195 | 15,971 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, authorized (in shares) | 15,000,000 | 15,000,000 |
Common stock, issued (in shares) | 9,956,210 | 8,301,497 |
Treasury stock, shares (in shares) | 284,522 | 284,522 |
Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 6,127 | $ 3,682 | $ 11,887 | $ 7,141 |
Unrealized (losses) gains on investment securities: | ||||
Non-credit related net unrealized gains (losses) on OTTI securities | 0 | 8 | 0 | 18 |
Unrealized (losses) gains on non-OTTI securities | (194) | 144 | (844) | 211 |
Tax impact on unrealized gain (loss) | 47 | (61) | 204 | (91) |
Reclassification of stranded tax effects | (27) | 0 | (27) | 0 |
Total unrealized (losses) gains on investment securities | (174) | 91 | (667) | 138 |
Comprehensive income | 5,953 | 3,773 | 11,220 | 7,279 |
Less: Comprehensive income attributable to noncontrolling interests | (16) | 17 | (16) | 18 |
Comprehensive income attributable to the Company | $ 5,937 | $ 3,790 | $ 11,204 | $ 7,297 |
ORGANIZATION |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Parke Bancorp, Inc. (the “Company, we, us, our”) is a bank holding company headquartered in Sewell, New Jersey. Through subsidiaries, the Company provides individuals, corporations and other businesses, and institutions with commercial and retail banking services, principally loans and deposits. The Company was incorporated in January 2005 under the laws of the State of New Jersey for the sole purpose of becoming the holding company of Parke Bank (the "Bank"). The Bank is a commercial bank, which was incorporated on August 25, 1998, and commenced operations on January 28, 1999. The Bank is chartered by the New Jersey Department of Banking and Insurance and its deposits are insured by the Federal Deposit Insurance Corporation. The Bank maintains its principal office at 601 Delsea Drive, Sewell, New Jersey, and seven additional branch office locations; 501 Tilton Road, Northfield, New Jersey, 567 Egg Harbor Road, Washington Township, New Jersey, 67 East Jimmie Leeds Road, Galloway Township, New Jersey, 1150 Haddon Avenue, Collingswood, New Jersey, 1610 Spruce Street, Philadelphia, Pennsylvania, and 1032 Arch Street, Philadelphia, Pennsylvania. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Financial Statement Presentation: We prepared our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP). The accompanying consolidated financial statements include the accounts of the Company, its wholly-owned subsidiary the Bank, and certain partnership interests. Parke Capital Trust I, Parke Capital Trust II and Parke Capital Trust III are wholly-owned subsidiaries but are not consolidated because they do not meet the requirements for consolidation under applicable accounting guidance. We have eliminated inter-company balances and transactions. We have also reclassified certain prior year amounts to conform to the current year presentation, which did not have a material impact on our consolidated financial condition or results of operations. The accompanying interim financial statements should be read in conjunction with the annual financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The accompanying interim financial statements for the three and six months ended June 30, 2018 and 2017 are unaudited. The balance sheet as of December 31, 2017, was derived from the audited financial statements. In the opinion of management, these financial statements include all normal and recurring adjustments necessary for a fair statement of the results for such interim periods. Results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results for the full year. Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the allowance for loan losses, other than temporary impairment losses on investment securities, the valuation of deferred income taxes, and carrying value of other real estate owned ("OREO"). Recently Issued Accounting Pronouncements: In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendment in this update allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the December 22, 2017, enactment of the reduced federal corporate income tax rate, which is effective in 2018. For public companies, the update is effective for annual periods beginning after December 15, 2018, with early adoption permitted. The amendment can be adopted at the beginning of the period or on a retrospective basis. The Company early adopted the ASU in the second quarter of 2018. The reclassification of the cumulative-effect of $27,000 from accumulated other comprehensive income to retained earnings was immaterial to our consolidated financial statements. During August 2016, the FASB issued ASU 2016-15, which is new guidance related to the Statement of Cash Flows. The new guidance clarifies the classification within the statement of cash flows for certain transactions, including debt extinguishment costs, zero-coupon debt, contingent consideration related to business combinations, insurance proceeds, equity method distributions and beneficial interests in securitizations. The guidance also clarifies that cash flows with aspects of multiple classes of cash flows or that cannot be separated by source or use should be classified based on the activity that is likely to be the predominant source or use of cash flows for the item. This guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The adoption of this guidance does not have a material effect on the consolidated financial statements. During June 2016, the FASB issued ASU 2016-13, Financial Instruments Credit Losses. ASU 2016-13 (Topic 326), replaces the incurred loss impairment methodology in current GAAP with an expected credit loss methodology and requires consideration of a broader range of information to determine credit loss estimates. Financial assets measured at amortized cost will be presented at the net amount expected to be collected by using an allowance for credit losses. Purchased credit impaired loans will receive an allowance account at the acquisition date that represents a component of the purchase price allocation. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses, with such allowance limited to the amount by which fair value is below amortized cost. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company is currently in the process of gathering historical loan data required for the credit loss methodology and is reviewing a model from a third-party vendor. While we expect this standard will have an impact on the Company’s financial statements, we are still in process of conducting our evaluation. On January 5, 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. This ASU's changes to the current GAAP model primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The accounting for other financial instruments, such as loans, investments in debt securities, and financial liabilities is largely unchanged. Also, the ASU requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. ASU 2016-01 is effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted the guidance effective January 1, 2018, using the modified retrospective method. Upon adoption, the Company is no longer required to disclose the methodologies used for estimating fair value of financial assets and liabilities that are not measured at fair value on a recurring or nonrecurring basis. The remaining requirements of this update did not have a material impact on the Company's consolidated financial statements. On February 25, 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 includes a lessee accounting model that recognizes two types of leases - finance leases and operating leases. The standard requires that a lessee recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. Leases with terms of less than 12 months are exempt from the new standard. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as finance or operating lease. New disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases are also required. These disclosures include qualitative and quantitative requirements, providing information about the amounts recorded in the financial statements. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years; that is, for a calendar year-end public entity, the changes take effect beginning January 1, 2019. The Company is working on gathering all key lease data elements to meet the requirements of the new guidance. The resulting change from this ASU should not have a major impact on the Company's financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 (Topic 606) supersedes the revenue recognition requirements in Accounting Standards Codification, Topic 605. The amendment requires a contract-based approach revenue model. For public companies, this update was effective for interim and annual reporting periods beginning after December 15, 2017. The Company adopted the guidance effective January 1, 2018, using the modified retrospective method. The Company’s revenue is primarily composed of interest income on financial instruments, including investment securities and loans, which are excluded from the scope of this update. Also excluded from the scope of the update is revenue from bank-owned life insurance, loan fees, and letter of credit fees. Deposit account related fees are within the scope of the guidance; however, revenue recognition practices did not change under the guidance, as deposits agreements are considered day to day contracts. Deposits account transaction related fees will continue to be recognized as the services are performed. Implementation of this guidance did not change current business practices. Implementation of this guidance did not have a material impact on the Company’s consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The ASU is effective for public business entities for fiscal years beginning after December 15, 2018. The Company does not expect the amendments will have any material impact on our consolidated financial statements. |
INVESTMENT SECURITIES |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT SECURITIES | INVESTMENT SECURITIES The following is a summary of the Company's investments in available for sale and held to maturity securities as of June 30, 2018 and December 31, 2017:
The amortized cost and fair value of debt securities classified as available for sale and held to maturity, by contractual maturity as of June 30, 2018 are as follows:
Expected maturities may differ from contractual maturities because the issuers of certain debt securities do have the right to call or prepay their obligations without any penalty. During the three and six months ended June 30, 2018, the Company did not sell any securities. At June 30, 2018, the Company used a letter of credit of $40.0 million as collateral to secure public deposits as compared to $32.5 million of securities available for sale pledged to secure public deposits at December 31, 2017. The following tables show the gross unrealized losses and fair value of the Company's investments which are aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2018 and December 31, 2017:
Other Than Temporarily Impaired Debt Securities (OTTI) On at least a quarterly basis, we review all debt securities that are in an unrealized loss position for OTTI. An investment security is deemed impaired if the fair value of the investment is less than its amortized cost. Amortized cost includes adjustments (if any) made to the cost basis of an investment for accretion, amortization, previous other-than-temporary impairments. After an investment security is determined to be impaired, we evaluate whether the decline in value is other-than-temporary. Estimating recovery of the amortized cost basis of a debt security is based upon an assessment of the cash flows expected to be collected. If the present value of the cash flows expected to be collected, discounted at the security’s effective yield, is less than the security’s amortized cost, OTTI is considered to have occurred. For a debt security for which there has been a decline in the fair value below amortized cost basis, if we intend to sell the security, or if it is more likely than not we will be required to sell the security before recovery of amortized cost basis, an OTTI write-down is recognized in earnings equal to the entire difference between the amortized cost basis and fair value of the security. For debt securities that are considered OTTI and that we do not intend to sell and will not be required to sell prior to recovery of our amortized cost basis, we separate the amount of the impairment into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings and is the difference between the security’s amortized cost basis and the present value of its expected future cash flows discounted at the security’s effective yield. The remaining difference between the security’s fair value and the present value of expected future cash flows is due to factors that are not credit-related and, therefore, is recognized in other comprehensive income. We have a process in place to identify debt securities that could potentially have a credit impairment that is other than temporary. This process involves monitoring late payments, pricing levels, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit issues. We consider relevant facts and circumstances in evaluating whether a credit or interest rate-related impairment of a security is other than temporary. Relevant facts and circumstances considered include: (1) the extent and length of time the fair value has been below cost; (2) the reasons for the decline in value; (3) the financial position and access to capital of the issuer, including the current and future impact of any specific events; (4) any change in rating agencies’ credit ratings at evaluation date from acquisition date and any likely imminent action; (5) for asset-backed securities, the credit performance of the underlying collateral, including delinquency rates, level of non-performing assets, cumulative losses to date, collateral value and the remaining credit enhancement compared with expected credit losses. The Company’s unrealized loss for the debt securities is comprised of 15 securities and 11 residential mortgage backed securities at June 30, 2018 and December 31, 2017, respectively. The mortgage backed securities that had unrealized losses were issued or guaranteed by US government or government sponsored entities. The unrealized losses associated with those mortgage backed securities are generally driven by changes in interest rates and not due to credit losses given the explicit or implicit guarantees provided by the U.S. government. Because the Company does not intend to sell the securities and it is not more likely than not that the Company will be required to sell these investments before recovery of their amortized cost basis, the Company does not consider the unrealized loss in these securities to be OTTI at June 30, 2018. |
LOANS AND ALLOWANCE FOR LOAN LOSSES |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS AND ALLOWANCE FOR LOAN LOSSES | LOANS AND ALLOWANCE FOR LOAN LOSSES As of June 30, 2018, the Company had $1.1 billion in loans receivable outstanding. Loans held for sale totaled $1.8 million at June 30, 2018. The portfolios of loans receivable at June 30, 2018 and December 31, 2017, consist of the following:
An age analysis of past due loans by class at June 30, 2018 and December 31, 2017 as follows:
Allowance For Loan and Lease Losses (ALLL) We maintain the ALLL at a level that we believe to be appropriate to absorb estimated probable credit losses incurred in the loan portfolios as of the balance sheet date. We established our allowance in accordance with guidance provided in Accounting Standard Codification ("ASC") - Contingencies (ASC 450) and Receivables (ASC 310). Determining the appropriateness of the allowance is complex and requires significant judgment reflecting the best estimate of credit losses related to specifically identified impaired loans as well as probable loan losses in the remaining loan portfolio. These evaluations are inherently subjective, as they require material estimates and may be susceptible to significant change. The allowance for loan and lease losses is reviewed by the management of the Company monthly and discussed with the audit committee at least quarterly. Our allowance for loan losses includes a formula based component and an asset-specific component. The asset-specific component of the allowance relates to loans considered to be impaired, which includes loans that have been modified in TDRs as well as nonperforming loans. To determine the asset-specific component of the allowance, the loans are evaluated individually based on the borrower's ability to repay amounts owed, collateral, relative risk grade of the loans, and other factors given current events and conditions. The Company generally measures the asset-specific allowance as the difference between the fair value (net realizable value) and the recorded investment of a loan. The formula based component of the allowance incorporates historical valuation allowance and general valuation allowance. The historical loss experience is measured by type of credit and internal risk grade, loss severity, specific homogeneous risk pools. A historical loss ratio and valuation allowance are established for each pool of similar loans and updated periodically based on actual charge-off experience and current events. The general valuation allowance is based on general economic conditions and other qualitative risk factors both internal and external to the Company. It is generally determined by evaluating, among other things: (i) the experience, ability and effectiveness of the Bank's lending management and staff; (ii) the effectiveness of the Bank's loan policies, procedures and internal controls; (iii) changes in asset quality; (iv) changes in loan portfolio volume; (v) the composition and concentrations of credit; (vi) the impact of competition on loan structuring and pricing; (vii) the effectiveness of the internal loan review function; (viii) the impact of environmental risks on portfolio risks; (ix) the impact of rising interest rates on portfolio risk; and (x) national and local economic trends and conditions, and industry conditions. Management evaluates the degree of risk that each one of these components has on the quality of the loan portfolio on a quarterly basis. Each component is determined to have either a high, high-moderate, moderate, low-moderate or low degree of risk. The results are then input into a "general allocation matrix" to determine an appropriate general valuation allowance. When evaluating the adequacy of the allowance, the assessment is highly judgmental as the measurement relies upon estimates such as loss severity, asset valuations, default rates, the amounts and timing of interest or principal payments or other factors that are reflective of current and expected market conditions. These estimates are, in turn, dependent on factors such as the duration of current overall economic conditions, industry, portfolio, or borrower-specific factors, the expected outcome of insolvency proceedings as well as, in certain circumstances, other economic factors, including the level of future home prices. All of these estimates and assumptions require significant management judgment and certain assumptions are highly subjective. The following tables present the information regarding the allowance for loan and lease losses and associated loan data:
Impaired Loans A loan is considered impaired when, based on the current information and events, it is probable that the Company will be unable to collect the payments of principal and interest as of the date such payments were due. Loans are placed on non-accrual status when, in management's opinion, the borrower may be unable to meet payment obligations as they become due, as well as when a loan is 90 days past due, unless the loan is well secured and in the process of collection, as required by regulatory provisions. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. All our impaired loans are assessed for recoverability based on an independent third-party full appraisal to determine the net realizable value (“NRV”) based on the fair value of the underlying collateral, less cost to sell and other costs or the present value of discounted cash flows in the case of certain impaired loans that are not collateral dependent. The following tables provide further detail on impaired loans and the associated ALLL at June 30, 2018 and December 31, 2017:
The following table presents by loan portfolio class, the average recorded investment and interest income recognized on impaired loans for the three and six months ended June 30, 2018 and 2017:
Troubled debt restructuring (TDRs) A TDR is a loan the terms of which have been restructured in a manner that grants a concession to a borrower experiencing financial difficulty. TDRs result from our loss mitigation activities that include rate reductions, extension of maturity, or a combination of both, which are intended to minimize economic loss and to avoid foreclosure or repossession of collateral. TDRs are classified as impaired loans and are included in the impaired loan disclosures. TDRs are also evaluated to determine whether they should be placed on non-accrual status. Once a loan becomes a TDR, it will continue to be reported as a TDR until it is repaid in full, foreclosed, sold or it meets the criteria to be removed from TDR status. At the time a loan is modified in a TDR, we consider the following factors to determine whether the loan should accrue interest:
We also review the financial performance of the borrower over the past year to be reasonably assured of repayment and performance according to the modified terms. This review consists of an analysis of the borrower’s historical results; the borrower’s projected results over the next four quarters; and current financial information of the borrower and any guarantors. The projected repayment source needs to be reliable, verifiable, quantifiable and sustainable. In addition, all TDRs are reviewed quarterly to determine the amount of any impairment. At the time of restructuring, the amount of the loan principal for which we are not reasonably assured of repayment is charged-off, but not forgiven. At June 30, 2018 and December 31, 2017, we reported TDR loans of $20.6 million and $21.2 million, respectively. There were no new loans modified as a TDR and no additional commitments to lend additional funds to debtors whose loans have been modified in TDRs during six months ended June 30, 2018 and the year ended December 31, 2017. Performing TDRs (not reported as non-accrual loans) totaled $20.3 million and $20.9 million as of June 30, 2018 and December 31, 2017. Nonperforming TDRs were $277,000 at June 30, 2018 and December 31, 2017, respectively. Loans modified in a TDR are evaluated for impairment. The nature and extent of impairment of TDRs, including those that have experienced a subsequent default, is considered in the determination of an appropriate level of allowance for loan losses. For the TDR loans, we had specific reserves of $329,000 and $457,000 in the allowance at June 30, 2018 and December 31, 2017. TDRs are generally included in nonaccrual loans and may return to performing status after a minimum of six consecutive monthly payments under restructured terms and also meeting other performance indicators. Credit Quality Indicators: As part of the on-going monitoring of the credit quality of the Company's loan portfolio, management tracks certain credit quality indicators including trends related to the risk grades of loans, the level of classified loans, net charge-offs, nonperforming loans (see details above) and the general economic conditions in the region. The Company utilizes a risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 7. Grades 1 through 4 are considered “Pass”. A description of the general characteristics of the seven risk grades is as follows:
An analysis of the credit risk profile by internally assigned grades as of June 30, 2018 and December 31, 2017 is as follows:
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TIME DEPOSITS TIME DEPOSITS |
6 Months Ended |
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Jun. 30, 2018 | |
Banking and Thrift [Abstract] | |
TIME DEPOSITS | TIME DEPOSITS The Company’s total deposits were $1.0 billion and $866.4 million at June 30, 2018 and December 31, 2017. The time deposits greater than $250,000 were $52.3 million and $51.1 million at June 30, 2018 and December 31, 2017, respectively. |
REGULATORY MATTERS |
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Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REGULATORY MATTERS | REGULATORY MATTERS Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can result in regulatory action. The final rules implementing Basel Committee on Banking Supervision's capital guidelines for U.S. banks (Basel III rules) became effective for the Company on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019. Under the Basel III rules, the Company must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer is being phased in from 0.0% for 2015 to 2.50% by 2019. The capital conservation buffer for 2018 is 1.875%. The Bank made one-time election to opt-out the net unrealized gain or loss on available for sale securities in computing regulatory capital. At June 30, 2018 and December 31, 2017, the Company and Bank were both considered “well capitalized" Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, under capitalized, significantly under capitalized, and critically under-capitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If under capitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. As of June 30, 2018 and December 31, 2017, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution's category. To be categorized as well capitalized, the Bank must maintain minimum total risk based, Tier 1 risk based, Tier 1 common equity, and Tier 1 leverage ratios as set forth in the following tables:
*The minimums under Basel III increase by .625% (the capital conservation buffer) annually until 2019. The fully phased-in minimums are 10.5% (Total risk-based capital), 8.5% (Tier 1 risk-based capital), and 7.0% (Tier 1 common equity). |
COMMITMENTS AND CONTINGENCIES |
6 Months Ended |
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Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES In the normal course of business, there are outstanding various contingent liabilities such as claims and legal action, which are not reflected in the financial statements. On March 1, 2018 the Bank entered into an agreement with the Federal Home Loan Bank of New York, for a Municipal Letter of Credit ("MLOC"), of $40.0 million. The MLOC will be used to pledge against public deposits and expires on March 1, 2019. |
EQUITY AND CHANGES IN OTHER COMPREHENSIVE INCOME (LOSS) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY AND CHANGES IN OTHER COMPREHENSIVE INCOME (LOSS) | EQUITY AND CHANGES IN OTHER COMPREHENSIVE INCOME (LOSS) The Company's total equity was $144.6 million and $134.8 million at June 30, 2018 and December 31, 2017, respectively. Common stock dividend: On March 20, 2018, the Company declared a quarterly cash dividend of $0.12 per share to the common shareholders of record as of April 13, 2018 and paid the dividend on April 27, 2018. On June 26, 2018, the Company declared a cash dividend $0.14 per share for the second quarter 2018 to the common shareholders of record as of July 13, 2018. The dividend was paid on July 27, 2018. Stock dividend: On April 17, 2018, the Company declared an 11 for 10 stock split to shareholders of record as of May 5, 2018. The stock split was accounted for as stock dividend and was paid on May 18, 2018. Conversion of preferred stock: During the first six months of 2018, preferred stock holders converted 6,776 shares of preferred shares into 847,023 shares of common shares before considering the effect of the stock dividend. Non-controlling interests: The Company has a joint venture with another party in PDL LLC, a joint venture formed in 2018 to originate short-term alternative real estate loan products. The Company has a 51% ownership interest in the joint venture. During the six months ended June 30, 2018, the other party made a $1.2 million capital contribution to PDL. The changes in accumulated other comprehensive income (loss) consisted of the following for the three months and six months ended June 30, 2018 and 2017:
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FAIR VALUE |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE | FAIR VALUE Fair Value Measurements The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the "Fair Value Measurements and Disclosures" Topic 820 of FASB ASC, the fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company's various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Fair value is a market-based measurement, not an entity-specific measurement. The fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. In accordance with this guidance, the Company groups its assets and liabilities carried at fair value in three levels as follows: Level 1 Input:
Level 2 Inputs:
Level 3 Inputs:
Fair Value on a Recurring Basis: The following is a description of the Company’s valuation methodologies for assets carried at fair value on a recurring basis. These methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes that its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting measurement date. Investment Securities and Loan Available for Sale: Where quoted prices are available in an active market, securities or other assets are classified in Level 1 of the valuation hierarchy. If quoted market prices are not available for the specific security or available for sale loans, then fair values are provided by independent third-party valuation services. These valuation services estimate fair values using pricing models and other accepted valuation methodologies, such as quotes for similar securities and observable yield curves and spreads. As part of the Company’s overall valuation process, management evaluates these third-party methodologies to ensure that they are representative of exit prices in the Company’s principal markets. For the available for sale (“AFS”) loans, the fair value represents the face value of the guaranteed portion of the SBA loans pending settlement. Securities and loans in Level 2 include mortgage-backed securities, corporate debt obligations, collateralized mortgage-backed securities, and SBA loans available for sale. The table below presents the balances of assets and liabilities measured at fair value on a recurring basis.
For the six months ended June 30, 2018, there were no transfers between the levels within the fair value hierarchy. The changes in Level 3 assets measured at fair value on a recurring basis are summarized as follows for the three and six months ended June 30, 2018 and 2017
Fair Value on a Non-recurring Basis: Certain assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).
Collateral-dependent impaired loans, which are measured in accordance with FASB ASC Topic 310 “Receivables”, for impairment, had a carrying amount of $7.6 million and $9.1 million at June 30, 2018 and December 31, 2017 respectively, with a valuation allowance of $87,000 and $458,000 at June 30, 2018 and December 31, 2017, respectively. The valuation allowance for collateral-dependent impaired loans is included in the allowance for loan losses on the balance sheet. All collateral-dependent impaired loans have an independent third-party full appraisal to determine the NRV based on the fair value of the underlying collateral, less cost to sell (a range of 5% to 10%) and other costs, such as unpaid real estate taxes, that have been identified, or the present value of discounted cash flows in the case of certain impaired loans that are not collateral dependent. The appraisal will be based on an "as-is" valuation and will follow a reasonable valuation method that addresses the direct sales comparison, income, and cost approaches to market value, reconciles those approaches, and explains the elimination of each approach not used. Appraisals are updated every 12 months or sooner if we have identified possible further deterioration in value. OREO consists of commercial real estate properties that are recorded at fair value based upon current appraised value, or agreements of sale, less estimated disposition costs using level 3 inputs. Properties are reappraised annually. Fair Value of Financial Instruments The Company discloses estimated fair values for its significant financial instruments in accordance with FASB ASC Topic 825, “Disclosures about Fair Value of Financial Instruments”. The methodologies for estimating the fair value of financial assets and liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. The methodologies for estimating the fair value of other financial assets and liabilities are discussed below. For certain financial assets and liabilities, carrying value approximates fair value due to the nature of the financial instrument. These instruments include cash and cash equivalents, restricted stock, accrued interest receivable, demand and other non-maturity deposits and accrued interest payable. Investment Securities: Fair value of securities available for sale is described above. Fair value of held to maturity securities is based upon quoted market prices for identical or similar assets. Loans Held for Sale: Fair value represents the face value of the guaranteed portion of SBA loans pending settlement. Loan Receivables. For residential mortgages loans, fair value is estimated using the quoted market prices for securities backed by similar loans, adjusted for differences in loan characteristics. The fair value of other types of loans is estimated by discounting the future cash flows using the risk adjusting current interest rates at which similar loans would be made to borrowers with similar credit ratings and same remaining maturities, adjusted for the liquidity discount and underwriting uncertainty. Deposits: The fair value of time deposits is based on the discounted value of contractual cash flows, where the discount rate is estimated using the market rates currently offered for deposits of similar remaining maturities. Borrowings: The fair values of FHLBNY borrowings, other borrowed funds and subordinated debt are based on the discounted value of estimated cash flows. The discounted rate is estimated using market rates currently offered for debts with similar credit rating, terms and remaining maturities. For a further discussion of the Company’s valuation methodologies for financial instrument measured at fair value, see the descriptions in the Company's 2017 Annual Report included in its Annual Report on Form 10-K. The following table summarizes the carrying amounts and fair values for financial instruments at June 30, 2018 and December 31, 2017:
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EARNINGS PER SHARE ("EPS") |
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EARNINGS PER SHARE ("EPS") | EARNINGS PER SHARE (“EPS”) The following tables set forth the calculation of basic and diluted EPS for the three and six-month periods ended June 30, 2018 and 2017.
All share and per share information has been adjusted for the 10% stock dividend effective on May 18, 2018. |
SUBSEQUENT EVENTS |
6 Months Ended |
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Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Accounting guidance establishes general standards of accounting for, and disclosure of, events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Accordingly, Management has evaluated subsequent events after June 30, 2018 through the date the financial statements were issued and determined that no subsequent events warranted recognition in or disclosure in the interim financial statements. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
6 Months Ended |
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Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Financial Statement Presentation | Basis of Financial Statement Presentation: We prepared our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP). The accompanying consolidated financial statements include the accounts of the Company, its wholly-owned subsidiary the Bank, and certain partnership interests. Parke Capital Trust I, Parke Capital Trust II and Parke Capital Trust III are wholly-owned subsidiaries but are not consolidated because they do not meet the requirements for consolidation under applicable accounting guidance. We have eliminated inter-company balances and transactions. We have also reclassified certain prior year amounts to conform to the current year presentation, which did not have a material impact on our consolidated financial condition or results of operations. The accompanying interim financial statements should be read in conjunction with the annual financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The accompanying interim financial statements for the three and six months ended June 30, 2018 and 2017 are unaudited. The balance sheet as of December 31, 2017, was derived from the audited financial statements. In the opinion of management, these financial statements include all normal and recurring adjustments necessary for a fair statement of the results for such interim periods. Results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results for the full year. |
Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the allowance for loan losses, other than temporary impairment losses on investment securities, the valuation of deferred income taxes, and carrying value of other real estate owned ("OREO"). |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements: In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendment in this update allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the December 22, 2017, enactment of the reduced federal corporate income tax rate, which is effective in 2018. For public companies, the update is effective for annual periods beginning after December 15, 2018, with early adoption permitted. The amendment can be adopted at the beginning of the period or on a retrospective basis. The Company early adopted the ASU in the second quarter of 2018. The reclassification of the cumulative-effect of $27,000 from accumulated other comprehensive income to retained earnings was immaterial to our consolidated financial statements. During August 2016, the FASB issued ASU 2016-15, which is new guidance related to the Statement of Cash Flows. The new guidance clarifies the classification within the statement of cash flows for certain transactions, including debt extinguishment costs, zero-coupon debt, contingent consideration related to business combinations, insurance proceeds, equity method distributions and beneficial interests in securitizations. The guidance also clarifies that cash flows with aspects of multiple classes of cash flows or that cannot be separated by source or use should be classified based on the activity that is likely to be the predominant source or use of cash flows for the item. This guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The adoption of this guidance does not have a material effect on the consolidated financial statements. During June 2016, the FASB issued ASU 2016-13, Financial Instruments Credit Losses. ASU 2016-13 (Topic 326), replaces the incurred loss impairment methodology in current GAAP with an expected credit loss methodology and requires consideration of a broader range of information to determine credit loss estimates. Financial assets measured at amortized cost will be presented at the net amount expected to be collected by using an allowance for credit losses. Purchased credit impaired loans will receive an allowance account at the acquisition date that represents a component of the purchase price allocation. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses, with such allowance limited to the amount by which fair value is below amortized cost. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company is currently in the process of gathering historical loan data required for the credit loss methodology and is reviewing a model from a third-party vendor. While we expect this standard will have an impact on the Company’s financial statements, we are still in process of conducting our evaluation. On January 5, 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. This ASU's changes to the current GAAP model primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The accounting for other financial instruments, such as loans, investments in debt securities, and financial liabilities is largely unchanged. Also, the ASU requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. ASU 2016-01 is effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted the guidance effective January 1, 2018, using the modified retrospective method. Upon adoption, the Company is no longer required to disclose the methodologies used for estimating fair value of financial assets and liabilities that are not measured at fair value on a recurring or nonrecurring basis. The remaining requirements of this update did not have a material impact on the Company's consolidated financial statements. On February 25, 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 includes a lessee accounting model that recognizes two types of leases - finance leases and operating leases. The standard requires that a lessee recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. Leases with terms of less than 12 months are exempt from the new standard. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as finance or operating lease. New disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases are also required. These disclosures include qualitative and quantitative requirements, providing information about the amounts recorded in the financial statements. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years; that is, for a calendar year-end public entity, the changes take effect beginning January 1, 2019. The Company is working on gathering all key lease data elements to meet the requirements of the new guidance. The resulting change from this ASU should not have a major impact on the Company's financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 (Topic 606) supersedes the revenue recognition requirements in Accounting Standards Codification, Topic 605. The amendment requires a contract-based approach revenue model. For public companies, this update was effective for interim and annual reporting periods beginning after December 15, 2017. The Company adopted the guidance effective January 1, 2018, using the modified retrospective method. The Company’s revenue is primarily composed of interest income on financial instruments, including investment securities and loans, which are excluded from the scope of this update. Also excluded from the scope of the update is revenue from bank-owned life insurance, loan fees, and letter of credit fees. Deposit account related fees are within the scope of the guidance; however, revenue recognition practices did not change under the guidance, as deposits agreements are considered day to day contracts. Deposits account transaction related fees will continue to be recognized as the services are performed. Implementation of this guidance did not change current business practices. Implementation of this guidance did not have a material impact on the Company’s consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The ASU is effective for public business entities for fiscal years beginning after December 15, 2018. The Company does not expect the amendments will have any material impact on our consolidated financial statements. |
INVESTMENT SECURITIES (Tables) |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Investments in Available-for-sale and Held-to-maturity Securities | The following is a summary of the Company's investments in available for sale and held to maturity securities as of June 30, 2018 and December 31, 2017:
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Investments Classified by Contractual Maturity | The amortized cost and fair value of debt securities classified as available for sale and held to maturity, by contractual maturity as of June 30, 2018 are as follows:
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Gross Unrealized Losses and Fair Value of Investments with Continuous Unrealized Loss Position | The following tables show the gross unrealized losses and fair value of the Company's investments which are aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2018 and December 31, 2017:
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LOANS (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio of Loans Outstanding | The portfolios of loans receivable at June 30, 2018 and December 31, 2017, consist of the following:
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Age Analysis of Past Due Loans by Class | An age analysis of past due loans by class at June 30, 2018 and December 31, 2017 as follows:
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Analysis of Allowance for Loan Losses | The following tables present the information regarding the allowance for loan and lease losses and associated loan data:
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Impaired Loans | The following tables provide further detail on impaired loans and the associated ALLL at June 30, 2018 and December 31, 2017:
The following table presents by loan portfolio class, the average recorded investment and interest income recognized on impaired loans for the three and six months ended June 30, 2018 and 2017:
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Analysis of Credit Risk Profile by Internally Assigned Grades | An analysis of the credit risk profile by internally assigned grades as of June 30, 2018 and December 31, 2017 is as follows:
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REGULATORY MATTERS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quantitative Measures Established by Regulation to Ensure Capital Adequacy Minimum Amounts and Ratios | As of June 30, 2018 and December 31, 2017, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution's category. To be categorized as well capitalized, the Bank must maintain minimum total risk based, Tier 1 risk based, Tier 1 common equity, and Tier 1 leverage ratios as set forth in the following tables:
*The minimums under Basel III increase by .625% (the capital conservation buffer) annually until 2019. The fully phased-in minimums are 10.5% (Total risk-based capital), 8.5% (Tier 1 risk-based capital), and 7.0% (Tier 1 common equity). |
EQUITY AND CHANGES IN OTHER COMPREHENSIVE INCOME (LOSS) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | The changes in accumulated other comprehensive income (loss) consisted of the following for the three months and six months ended June 30, 2018 and 2017:
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FAIR VALUE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The table below presents the balances of assets and liabilities measured at fair value on a recurring basis.
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Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis | The changes in Level 3 assets measured at fair value on a recurring basis are summarized as follows for the three and six months ended June 30, 2018 and 2017
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Fair Value on a Non-recurring Basis | Certain assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).
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Summary of Carrying Value and Fair Value of Financial Instruments | The following table summarizes the carrying amounts and fair values for financial instruments at June 30, 2018 and December 31, 2017:
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EARNINGS PER SHARE ("EPS") (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of Basic and Diluted EPS | The following tables set forth the calculation of basic and diluted EPS for the three and six-month periods ended June 30, 2018 and 2017.
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ORGANIZATION (Details) |
6 Months Ended |
---|---|
Jun. 30, 2018
branch
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Date of commencement of operations | Jan. 28, 1999 |
Number of additional branch office locations | 7 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands |
3 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Accounting Standards Update 2018-02 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect on retained earnings | $ 27 |
INVESTMENT SECURITIES - Amortized Cost and Fair Value of Debt Securities (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Amortized Cost | ||
Due within one year | $ 6 | |
Due after one year through five years | 349 | |
Due after five years through ten years | 8,537 | |
Due after ten years | 26,394 | |
Total available for sale | 35,286 | |
Fair Value | ||
Due within one year | 6 | |
Due after one year through five years | 331 | |
Due after five years through ten years | 8,224 | |
Due after ten years | 25,674 | |
Total available for sale | 34,235 | $ 37,991 |
Amortized Cost | ||
Due within one year | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 1,086 | |
Due after ten years | 0 | |
Amortized cost | 1,086 | 2,268 |
Fair Value | ||
Due within one year | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 1,258 | |
Due after ten years | 0 | |
Total held to maturity | $ 1,258 | $ 2,468 |
LOANS AND ALLOWANCE FOR LOAN LOSSES - Troubled Debt Restructuring (Details) |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2018
USD ($)
loan
|
Jun. 30, 2017
loan
|
Dec. 31, 2017
USD ($)
|
|
Receivables [Abstract] | |||
Period of current payment history | 6 months | ||
Number of projected future quarters under review | 1 year | ||
TDR loans | $ 20,600,000 | $ 21,200,000 | |
Performing TDRs | 20,300,000 | 20,900,000 | |
Nonperforming TDRs | 277,000 | 277,000 | |
Allowances for performing TDRs | $ 329,000 | 457,000 | |
Allowance for nonperforming TDRs | $ 0 | ||
Number of loans modified as TDRs | loan | 0 | 0 | |
Subsequent default, number of contracts | loan | 0 |
TIME DEPOSITS (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Banking and Thrift [Abstract] | ||
Deposits | $ 1,017,896 | $ 866,383 |
Time deposits, above FDIC insurance limit | $ 52,300 | $ 51,100 |
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) |
Jun. 30, 2018 |
Mar. 01, 2018 |
---|---|---|
Line of Credit | ||
Debt Instrument [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 40,000,000.0 | $ 40,000,000 |
EQUITY AND CHANGES IN OTHER COMPREHENSIVE INCOME (LOSS) - Equity (Details) $ / shares in Units, $ in Thousands |
6 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jun. 26, 2018
$ / shares
|
Apr. 17, 2018 |
Mar. 20, 2018
$ / shares
|
Jun. 30, 2018
USD ($)
shares
|
Dec. 31, 2017
USD ($)
|
Jun. 30, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Class of Stock [Line Items] | |||||||
Total equity | $ 144,642 | $ 134,780 | $ 132,232 | $ 127,090 | |||
Common stock, dividends, declared (in dollars per share) | $ / shares | $ 0.14 | $ 0.12 | |||||
Stock split, conversion ratio | 1.1 | ||||||
Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Total equity | $ 9,195 | 15,971 | 19,828 | 20,000 | |||
Conversion of stock, shares converted (in shares) | shares | 6,776 | ||||||
Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Total equity | $ 996 | $ 830 | $ 786 | $ 715 | |||
Shares issued upon conversion (in shares) | shares | 847,023 | ||||||
PDL LLC | Corporate Joint Venture | |||||||
Class of Stock [Line Items] | |||||||
Ownership percentage | 51.00% | ||||||
Other ownership interests, contributed capital | $ 1,200 |
EQUITY AND CHANGES IN OTHER COMPREHENSIVE INCOME (LOSS) - Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Equity [Abstract] | ||||
Non-credit related net unrealized gains (losses) on OTTI securities | $ 0 | $ 8 | $ 0 | $ 18 |
Unrealized (losses) gains on non-OTTI securities | (194) | 144 | (844) | 211 |
Tax impact on unrealized gain (loss) | 47 | (61) | 204 | (91) |
Reclassification of stranded tax effects | (27) | 0 | (27) | 0 |
Total unrealized (losses) gains on investment securities | $ (174) | $ 91 | $ (667) | $ 138 |
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